NETHERLANDS - Dutch securities services provider Kas Bank is overhauling its 110 million-euro pension fund because pensions are becoming “unaffordable”.

The bank is transferring its final pay scheme to a combined final pay/average-pay scheme.

Kas Bank said 97% of its 750 participants had agreed to the rejig, which will be effective as of January 1 2005.

“Like a lot of other companies in the Netherlands, we had to change the scheme because pensions are simply becoming unaffordable,” a bank spokesman said. “It is simply a matter of costs.”

The changes mean current participants will have to start paying a contribution as of July 2006. Kas Bank said it would pay the first 10% of pension contribution while any additional required contribution is to be divided equally between the bank and its employees.

“These adjustments have resulted in a tenable and financially achievable pension scheme for all interested parties in the pension fund,” the bank said.

Elsewhere, ABP, the 160 billion-euro pension fund for civil servants in the Netherlands, confirmed it is increasing pension premiums in 2005. Europe’s biggest pension fund linked the hike to a strong fall in real interest rates.

ABP said participants in the fund will, on average, see premiums grow by 0.5%. In total, premiums are set to rise by 2.6 percentage-point, to 21%. ABP follows similar moves by the PGGM and PME funds earlier in the year.